Canadian oil sands producers stay defiant in face of price slump

CALGARY, Alberta Jan 20 (Reuters) - Canada's oil sands
companies are perilously close to operating at a loss after six
months of plunging crude prices, yet many say they have no plans
to cut production at their vast projects in northern Alberta.

On the contrary, Syncrude and Canadian Natural Resources Ltd
are planning to boost production, in the expectation
economies of scale will cut their cost per barrel.

With U.S. crude diving below $45 a barrel last week,
companies including Syncrude Canada, Suncor Energy Inc
and Imperial Oil Ltd are getting close to operating
costs exceeding outright Canadian crude prices.

But these oil sands giants, which have billions of dollars
sunk in existing projects, say they have no intention of
shutting down operations, preferring to generate whatever cash
they can from sales.

A favourable exchange rate is also providing some relief, as
producers pay costs in Canadian dollars and receive more
valuable U.S. dollars for their crude.

Syncrude forecasts operating costs at C$45.69 ($38.07) per
barrel in 2015. Oil sands crude trades at a discount to the West
Texas Intermediate benchmark and the outright synthetic
price dropped below $42 a barrel at one point last week.

Siren Fisekci, spokeswoman for Canadian Oil Sands Ltd
, the largest-interest owner in the project, said
Syncrude would ramp up rather than scale back output.

"Syncrude has operated for 35 years and at other prices in
the crude oil cycle," Fisekci said. "We'll put as much
production as possible through the plant."
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